Are employers allowed to pay tipped employees less than minimum wage?

In Massachusetts, employers are not allowed to pay tipped employees less than the minimum wage. The current minimum wage in Massachusetts is $12.75 per hour - this rate applies to both tipped and non-tipped employees. However, employers may take into account any tips earned by tipped employees as part of their overall minimum wage rate. This means that if an employee earns at least $12.75 per hour in tips, their employer may reduce the minimum wage they are entitled to under Massachusetts law by up to $3.75 per hour. This form of wage reduction is allowed so long as the employee’s overall pay, including tips, is equal to or greater than the state’s minimum wage. Furthermore, the employer must inform their employees of the reduced wage in writing before any deduction from their wages is made. It is important to note that this does not mean that employers may pay their tipped employees less than minimum wage as a starting wage. They must still pay the minimum wage of $12.75 per hour and must evaluate tips earned by their staff to determine if they qualify for a reduced wage rate. However, employers are not allowed to pay their staff less than the minimum wage even if they earn tips.

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Are employers allowed to pay tipped employees less than minimum wage?

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